Main Street Capital Corporation announced the full exit of its debt and equity positions in KBK Industries, LLC with the sale of the company to a strategic acquirer. Founded in 1975 and based in Rush Center, Kansas, KBK is a leading manufacturer of large-volume fiberglass and steel tanks serving diversified end markets across the United States. The divestiture marks the conclusion of a 20-year partnership initiated through a majority recapitalization in January 2006.

Upon exit, Main Street realized a $17.3 million gain on its equity investment in KBK. Over the life of the equity stake, the firm also received cumulative dividends of $25.1 million. These distributions, combined with the equity gain, translate to an annual internal rate of return of 127.2% and a 62.7-times money-invested multiple on the equity investment alone.

Since the initial commitment, Main Street’s total investment in KBK amounted to $16.3 million in equity and $15.6 million in first-lien, senior-secured debt, including revolver extensions and additional term debt financings. Incorporating debt, warrant and equity returns, the firm achieved a 27.7% annual IRR and a 3.5-times money-invested multiple on its aggregate capital deployed in the company.

The successful exit underscores Main Street’s long-term, customized financing approach to lower middle-market companies. The realized performance metrics reinforce the firm’s track record of generating outsized returns through structured debt and minority equity stakes. Going forward, Main Street anticipates deploying capital into similarly resilient businesses with annual revenues between $10 million and $150 million, leveraging its one-stop financing model to support management buyouts, recapitalizations, growth financings and acquisitions.